Let councils sharpen commercial edge to level up locally, new report urges

Let councils sharpen commercial edge to level up locally, new report urges

Councils should have the confidence to engage in well-run commercial activity that benefits residents, improves local public services and generates much-needed revenue independent of central government, a report issued by consultants Human Engine and the think-tank Localis has advised today.

In a research paper issued today entitled ‘The Commercial Edge – renewing the case for the local investment state’ Human Engine and Localis argued that when carried out professionally and with risks properly-managed, council commercialism can unlock immense latent place potential and deliver many clear benefits to galvanise economic and social recovery.

In reframing the debate on local government commercialism, councils are advised to apply five common themes of commercial maturity around strategy and alignment; supply; demand, market intelligence and organisational culture.

The report also sets out a suite of recommendations to inform future commercial decisions aimed at local government leaders, town hall scrutiny members and central government partners.

Localis chief executive, Jonathan Werran, said: “Councils have historically always been involved with commercial activity in some shape or form in creating revenue streams that improve residents’ lives and deliver better local services.  This is a golden thread and is one worth preserving into the future.

“To maintain this tradition of strong self-government built on local investment and use this agenda to continue to deliver innovative public services into the future will require a shared language and understanding of how commercialism should work in practice across local and central government.

“Renewing the agenda will also rightly require a fresh approach to local scrutiny and governance and the immense rewards of capturing greater public and social value should be measured to encourage best practice across the sector.”

Jonathon Noble, managing director, Human Engine, said: “Commercialism in the public sector is a multi-faceted issue.  Too often, it is reduced to a binary debate over whether councils should or shouldn’t generate income through commercial means, underscored by cautionary tales of high profile failures.

“The reality is more complex than this.  The truth is that it is impossible to deliver modern public services without commercial acumen – whether developing a deep understanding of the key markets with which you do business, negotiating better value for the public or redesigning services with customers in mind.  These are all hallmarks of a mature commercial approach.

“Through our research and discourse with councils nationally, this report seeks to reframe the discussion to a more rounded view of commerciality, fundamentally aligning commercial activity to  an organisation’s strategic objectives and the creation of public value.”

A copy of the full report is available here: ‘The Commercial Edge – renewing the case for the local investment state’